The owner of Premier Inn, Whitbread, has posted a 22% fall in pre-tax profits to £309m in its H1 results.

In the six-month period to 29 August, Whitbread said its total revenue had remained flat at £1.57bn, with the company ramping up a cost-cutting programme amid slowing demand.

The group, which also owns the Beefeater and Brewers Fayre restaurant chains in addition to Premier Inn, revealed that UK accommodation sales were down 1% in the six weeks to 10 October.

However, Whitbread said it still had “increased confidence” in delivering a five-year plan, which would see the company increase its adjusted profit before tax at least £300m by the 2030 financial year compared to 2025. Whitbread is also aiming to generate more than £2bn for dividends, share buybacks and investments.

“In the UK, we have a clear pathway to further extend our market-leading position and capitalise on the favourable UK supply backdrop,” chief executive, Dominic Paul, said.

“We are determined to build on our significant outperformance since the pandemic and whilst the market has been slightly softer than last year, we remain on course to grow our UK returns substantially over the medium-term whilst continuing to deliver for our customers.

“Having laid the foundations for future growth, we are executing at pace and remain confident in the outlook as reflected by our increased interim dividend and further share buyback.”

Investment director at AJ Bell, Russ Mould, commented that Whitbread is “in it for the long-term” and suggested that up and down periods are “perfectly normal”.

“Tougher market conditions just happened to coincide with changes to its restaurant business, creating a double whammy of headwinds that has derailed its earnings growth,” Mould added.

“To Whitbread’s credit, it is still outperforming the mid-scale and economy hotel markets. That is one reason why investors haven’t punished the company today. The shares are up as it is doing its best in a tough environment.”

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